Seymore Company Has Two Service Departments (Cafeteria and Human Resources)

question 6

Multiple Choice

Seymore Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly) . The number of employees in each department follows. $$\begin{array} { l r } \text { Cafeteria } & 20 \\\text { Human Resources } & 30 \\\text { Machining } & 100 \\\text { Assembly } & 150\end{array}$$ Seymore uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the firm than Cafeteria. How much Human Resources cost would be allocated to Cafeteria?

• A) $88,888.
• B) $28,572.
• C) $44,444.
• D) $0.
• E) None of the other answers are correct.

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